AG Cruz Villalón in C-176/12 AMS: Rights vs. principles and the horizontal effect of Charter provisions Ante Portas
On July 18th, Advocate General Cruz Villalón delivered a fascinating opinion in a case that could very well keep quite a number of scholars interested in EU fundamental rights law busy for a while. In Association de Médiation Sociale not yet available in English as far as I can see) the Court is confronted with a set of fundamental questions. First, whether the workers’ right to information and consultation within the undertaking as enshrined in Article 27 of the Charter and implemented through Directive 2002/14 establishing a framework for informing and consulting employees in the Union can be applied in a legal dispute between two private parties, i.e. on its potential horizontal effect. Second, this also implies discussing – for the first time explicitly – the difference between rights and principles enshrined in Articles 51 (1) and 52 (5) of the EU Charter of Fundamental Rights. In particular, this requires shedding light on the notion of implementation of principles, as Article 52 (5) speaks of principles being ‘judicially cognisable’ only in the interpretation of their implementing acts and the ruling on their legality. Third, the act with which the Union implemented the principle in the present context is a directive, which again raises the question as to the limits to the effect of directives in a legal dispute between private parties, as has already caused problems in well-known cases like Mangold and Kücükdeveci. As the opinion is already quite comprehensive, I’ll keep my comments to the minimum to not try our readers’ patience.
The case concerns Mr Hichem Laboubi who works for the Association de Médiation Sociale (AMS). The AMS pursues the mission to prevent crime and provide perspectives for professional development to young persons in difficult parts of the region of Marseille. A union – the Union Locale des Syndicats CGT Quartiers Nord – decided to nominate Mr Laboubi as representative of a newly founded union branch in the AMS. The AMS, however, contended that the legal requirements for founding such a branch and nominating a representative were not met and suspended the working relationship with Mr Laboubi. AMS employed only eight employees like Mr Laboubi under contracts of indefinite duration, while between 120 and 170 adolescents were employed by means of so-called ‘accompanying contracts’ (‘contrats d’accompagnement dans l’emploi’). Article L. 1111-3 Code du travail provides for an exception in the calculation of the number of employees of a company for this purpose. The exception applies among others to those employed by such accompanying contracts. As a consequence, according to AMS the requirements of Directive 2002/14 were not applicable, since the Directive foresees a minimum number of 50 employees. The case is thus about whether Article 1111-3 Code du travail is compatible with the right of workers’ to information and consultation under Article 27 Charter of Fundamental Rights as implemented by Directive 2002/14: Should Mr Laboubi and the union be able to rely on EU law in legal proceedings between private parties to exclude the application of the French norm and enforce the right to information and consultation? Or would this impose an undue disadvantage on AMS as the employer for a potentially flawed transposition of Directive 2002/14 by the French State?
The Advocate General decided to first tackle the more principled questions of horizontal effect and of the legal effect and justiciability of Charter principles implemented by a directive before examining the practical case at issue.
Starting with the general effects of the Charter between private parties, the Advocate General emphasized that Article 51 (1) of the Charter which speaks of application of the Charter to the Union and the Member States does not e contrario exclude effects on private parties by not mentioning them (para 29); not only do declarations of fundamental rights typically not address private parties, but Article 51 (1) also primarily addresses the completely different problem of the reach of the binding effect of the Charter for organs of the Union and the Member States rather than its effects in the relations between private parties (paras 30-31). The second sentence of Article 51 (1) which imposes the obligations of ‘respecting’ rights, while ‘observing’ and ‘promoting the application of’ principles in accordance with the respective powers also addresses primarily the separation of competences between the Union and its Member States and the different duties imposed by rights and principles and not the relevance of fundamental rights in private relations (para 32).
Since in any event horizontal effect of the fundamental freedoms and of the principle of non-discrimination on the basis of sex are well-recognised phenomena in EU law, it would appear paradoxical if the introduction of the Charter would deteriorate the situation of fundamental rights protection in primary law (paras 34-35). After some discussion of different understandings of horizontal effect, the Advocate General found that of course, the concrete potential for horizontal effect differed from right to right (para 38). Focusing on Article 27 of the Charter, it would appear more than daring to exclude any effect of rights such as Article 27 in private relations, as the article itself refers in its title to the right having to be granted ‘within the undertaking’ (paras 39-40) and definitely implies legal obligations for companies in practice (para 40).
The Advocate General concludes thus that Article 27 of the Charter can be relied upon in principle in legal proceedings between private parties, or at least not excluded based on Article 51 (1) of the Charter (para 41). Mr Laboubi and the union could thus at least in principle rely on EU law to argue that the suspension of the working relationship and the refusal of founding a union branch based on Article 1111-3 Code du travail were contrary to EU law.
Rights and principles
With the Charter not clarifying whether Article 27 is a right or a principle, the Advocate General then had to address the content of the provision (para 43). In the Charter as in national constitutions typically claims of the nature of social rights are typically designated as ‘social rights’ to indicate that no individual subjective rights can be derived from them, but that they only function via the implementation or concretisation through the State. They are thus rights in terms of their content and nature, but principles in terms of their operation (para 45).
In the Charter terminology, the notion of ‘principle’ points towards a more open obligation of the public powers, as it would not define an individual legal situation, but general topics and results which condition the actions of all public powers (para 50). Some of the express examples given for principles in the Explanations accompanying the Charter demonstrate the obligatory nature of principles (para 51). Article 27 mirrors a typical social right as it is also enshrined in the European Social Charter and the Community Charter of the Fundamental Social Rights of Workers; also, it is the first article in the title ‘Solidarity’ of the Charter; before entry into force of the Charter, the right was already enshrined in secondary legislation such as Directive 2002/14 (para 52). For the Advocate General, the better arguments spoke thus in favour of giving the status of a principle to Article 27, in particular because the provision seemed to contain in its structure a mandate for the public powers (para 53). The scope of the right granted under Article 27 is, in the Advocate General’s eyes, rather limited, as information and consultation of workers is to be granted ‘in good times in the cases and under the conditions provided for by Union law and national laws and practices’. Without further concretising the modalities, the provision thus mandates action, while it only provides the objective to be reached (para 54). Systematically, the rights under the title ‘Solidarity’ also contain mainly rights typically seen as ‘social rights’, which supports reading Article 27 as a principle (para 55). Mr Laboubi and the union could thus not derive a subjective right from the principle enshrined in Article 27 of the Charter.
Making principles operational
Having found Article 27 to be a principle, the Advocate General then had to assess whether and to what extent under Article 52 (5) even principles could be made operative before a court as far as their implementing acts are concerned. The first sentence of the provision thus determined the conditions for application of principles, while the second focused on the scope of their justiciability (para 57).
The EU and the Member States are obliged to promote principles, and implement them thus through measures; despite the use of the term ‘may be implemented’, Article 52 (5) does not contain a permission within the margin of discretion of the Union and the Member States, but a clear obligation which is concretised in Article 51 (1) through the requirement to ‘promote’ the application of principles through implementation (para 60). Article 52 (5) first sentence confirms by its very wording that implementing measures are of a legal nature and to be taken by legislative and executive organs, pointing towards a necessarily ‘specifically normative’ implementation (paras 61-62). To affirm the practical effectiveness of legal principles, the Advocate General suggests that implementing acts should be understood as those that ‘substantively and directly’ concretise the content of a principle, to avoid regarding whole areas of regulatory action such as the social or environmental law of a Member State as an implementing measure (paras 63-64). Article 3 (1) of Directive 2002/14 offers a good example of ‘substantive and direct’ concretisation, as this provision concerns based on its title the scope of application of the rights enshrined in the Directive (para 65). Article 3 (1) lays down the personal scope of application of the right to information and consultation and thus forms part of the content of Article 27 of the Charter that can be enforced before a court (para 66).
As regards the enforceability of principles, the Charter excludes any such enforceability of subjective rights based on a principle, but only permits enforceability before a court using the criterion of implementing acts (para 68). However, such acts cannot only be those that exclusively aim at normative transposition of giving content to the principle. This would lead to the vicious circle that such acts would have to be assessed against the benchmark of a principle whose content is exactly that given to it by the implementing act itself (para 69). The scope of implementing acts under Article 52 (5) second sentence thus has to be wider than mere acts that substantially and directly concretise the content of a principle, because otherwise Article 27 and its judicial protection under Article 52 (5) second sentence would lose all practical effect (para 70).
Therefore, the characteristic function of acts that substantially and directly concretise a principle has to be that they become part of the criteria of validity for the other acts which implement a principle; these other acts have to be examined based on the criterion which stems from the wording of the relevant principle and the acts of its substantial and direct concretisation (para 71). Article L.1111-3 Code du travail is such an implementing act in the wider sense, because it acts as a ‘channel’ to implement the right to information and consultation and is suitable – as a norm that excludes a certain category of workers from the calculation of the number of employees – to violate the content of the principle as concretised substantially and directly by implementing acts (para 72). While Mr Laboubi and the union had thus no subjective right under Article 27, the implementing acts of the principle enshrined in Article 27 could thus be assessed against the benchmark of the concretised principle of Article 27 – leading potentially to a finding of incompatibility and thus inapplicability of Article 1111-3 Code du travail.
Implementation through a directive
The fact that the implementing act is a directive raises the question whether the legal nature and in particular the limited horizontal effect thus granted to a directive poses an insurmountable obstacle for the solution proposed thus far (para 73). For the Advocate General, however, this was not the case and his suggested solution could also be reconciled with the earlier case law of the Court, since the cases of provisions of a directive implementing substantially and directly a principle of the Charter were not to be expected to be numerous and highly practically relevant (para 76). Also, the present proposal would fall in line with the developing case law of the Court of Justice which would allow in certain cases an objective control of legality of national legal acts in the light of directives in proceedings between private parties, continuing thereby in a line of cases like CIA Security, Mangold or Kücükdeveci (para 77).
Still, one private party in the concrete proceedings could now argue that it had to carry obligations that it could not foresee to have accepted. However, the Advocate General suggested that the party suffering damage from being under such an unforeseen obligation could still claim damages against the Member State for the damages resulting from the violation of EU law by the national implementing act. While the action for damages had been initially conceived to protect those having a subjective right to be enforced before national courts, a reasonable solution in the present situation could be that the party who had drawn a benefit from the implementing act contrary to EU law now would be required to carry the burden of undertaking the necessary steps of an action for damages against the Member State; this would appear more justified than to impose said burden on the party who possesses a right created through the concretisation of the content of a principle (para 79). For Mr Laboubi and the union, this meant that the implementing act’s nature of a directive did not hinder it from being a benchmark for the assessment of Article 1111-3 Code du travail.
Conclusion and solution of the concrete case
Consequently, based on these reasons for the Advocate General Article 27 of the Charter as concretised through Article 3 (1) of Directive 2002/14 could be enforced in legal proceedings between private parties, with the possible result of the national norm being no longer applied (para 80).
To answer the concrete question at issue, the Advocate General turned towards a case brought up by the union. In that case, the Court had found that temporary excluding employees from the calculation of the number of employees of an undertaking until they reached a certain age could not be accepted, as it undermined the rights granted in Directive 2002/14 and went against the Directive’s practical effectiveness (para 85). If even a temporary exclusion of employees had not been found to be acceptable in CGT, a complete and unlimited exclusion necessarily had to be contrary to EU law (para 95). As a consequence, Article 1111-3 Code du travail could neither be applied as a basis to refuse the foundation of a union branch in AMS nor to justify the suspension of the working relationship with Mr Hichem Laboubi.
I must say that I find myself to quite some extent in agreement with the Advocate General here. The question of horizontal effect may be controversial, but it definitely has to be answered looking at the nature of Charter rights and principles. What is, of course, a shortcoming is that at some points opportunities to provide a more contextual reading of the Court’s case law is missed. This may for example be just “yet another” case of some sort of horizontal effect of directives, but the mere fact that these cases remain rare in practice is not yet a satisfactory explanation as to why there should be such effect. Also, I am not sure whether the criterion of substantial and direct concretisation of principles in implementing acts will stand in the future, in particular if the broader range of implementing acts that can be challenged against the concretised content of a Charter principle are chosen based on whether they are suitable to violate said content – there is some danger of only finding implementing acts where they also have a high likelihood of violating the Charter. But the Advocate General’s effort of furthering the jurisprudence is definitely laudable in itself. Let us see what the Court makes of this potentially important case.